Blog » Coverage FAQs

Coverage FAQs

posted Jan 01, 2020

Q.
Where can I find the Fund's Workers' Compensation and Employers' Liability Policy?
A.
All members are mailed a policy but to view the Kentucky AGC/SIF's Workers' Compensation and Employers' Liability Policy, click here. Note that the Information Page which contains other specific information is mailed individually to each Fund Member and is not available on this site.
Q.
Does the Fund provide Out of State Coverage?
A.
Since January 1, 1994, the Kentucky AGC/SIF has afforded Out-of-State Workers' Compensation Coverage for its members without the 30-day limitation imposed in prior years but with the continuing requirement that its members must use Regularly Employed Kentucky Employees, with no exceptions.
Q.
What is the definition of a Regularly Employed Kentucky Employee?
A.
An employee who is a resident of Kentucky and/or employed by a resident Kentucky employer or is hired from a resident Kentucky union hall and performs work within the scope of said employment for said employer for a minimum period of eight (8) hours in the Commonwealth of Kentucky prior to performing any work in any other state, excluding Florida, Illinois, New Jersey and New York, with said period evidenced by payroll records from said employer. This statement shall not conflict with KRS 342.670(1) (a, b, c, or d).
Q.
What if I am or will be doing any work in Florida, Illinois, New Jersey and/or New York?
A.
You must secure separate workers' compensation policies from carriers that are admitted in Florida, Illinois, New Jersey or New York. As a result, the AGC/SIF cannot directly provide Florida, Illinois, New Jersey or New York workers' compensation coverage for you under any circumstances, and you are not to report any payroll for any work performed in Florida, Illinois, New Jersey or New York. Please see our information about Other States/Cross Border Coverage in the next question and/or contact your agent to secure alternative means of coverage if work is being performed in the states of Florida, Illinois, New Jersey or New York.
Q.
What if I am performing work in Florida, Illinois, New Jersey and/or New York AND/OR cannot take Regularly Employed Kentucky Employees?
A.
Effective 1/1/2010 in response to ever-changing market conditions, the Kentucky AGC/SIF partnered with the Safety National Casualty Corporation (Safety National) to provide an OUT-OF-STATE (OOS)/CROSS-BORDERS PROGRAM solution for its membership population (NOTE: The Kentucky AGC/SIF will continue to provide OOS coverage for its members who use Regularly Employed Kentucky Employees in states where the Kentucky AGC/SIF is permitted to do so). In order to obtain access to the program, the following general underwriting criteria must be met:
  • Must be a member of the Kentucky AGC/SIF (or plan to join)
  • Class codes contemplated for the OOS/Cross-Borders program must be the same as those class codes contemplated by the member's Fund policy
  • Members must have a loss ratio of ≤ 60% for the past three (3) years (exceptions may be considered on a case-by-case basis)
  • Designated states only
  • Limited out-of-state exposure (generally 40% or less of total annualized payroll)
  • In order to begin procuring a quote for the OOS/Cross-Borders program, the following information will be needed:
    • A completed ACORD application
    • Detailed description of the job or work being performed out-of-state
    • Proposed effective date
    • Estimated payroll by class code
    • Three years of Kentucky and applicable out-of-state experience
    • Large loss details on all losses over $50,000
    • Current workers' compensation Experience Mod
    • Loss control report for the most recent inspection
Should you have any questions regarding the OOS/Cross-Borders program, please contact the Fund Office Underwriting Department at (502) 245-2007 or (800) 928-7135.
Q.
What is the Fund's policy on coverage of uninsured subcontractors?
A.
Workers' Compensation coverage for uninsured subcontractors is provided under the AGC/SIF policy issued to the AGC/SIF member with premium charged accordingly for the coverage of the uninsured subcontractor to the AGC/SIF member. This can also include Independent Contractors and Contract Labor. Please also refer to the Premium FAQ's for how premium is charged for Independent Contractors, Subcontractors and Contract Labor.
Q.
Does the Fund accept Form-4's?
A.
The Kentucky AGC/SIF does NOT accept ANY waivers, Form-4's, or other contractual agreements that waive workers' compensation insurance coverage on any individual or company. An exception to this are Forms-4's on owners or officers of a corporation, not employees and the rejection notice on the owners or officers must be on file with the Kentucky Department of Workers' Claims to be valid.
Q.
Does the Fund provide workers' compensation coverage on Sole Proprietors and Partnerships?
A.
Not automatically. Action by the owner/partner must be taken before they are covered under the policy. If coverage is desired, an ELECTION NOTICE must be filled out and submitted to the Fund Office to afford coverage. If this coverage is elected, the premium will be based on a flat standard payroll amount of $45,200 (2020) for the owner or for each partner who elects coverage. This flat payroll amount is used regardless of the actual amount paid to you by your company. Please note that the flat standard payroll amount is actuarily determined annually by the National Council on Compensation Insurance and subsequently approved by the State of Kentucky. If there are questions concerning the current year's flat payroll amount, please call the Fund Office.
Q.
What if my company changes its entity status?
A.
If your company has any change as to the type of company that it is (sole proprietorship, partnership, corporation, LLC, etc.,) CONTACT THE FUND OFFICE IMMEDIATELY. Failure to do so could result in additional premiums being assessed for officers who did not want to be covered under the policy, no coverage provided for an owner, or other unintended consequences.
Q.
Does the Fund cover Officers/Members of Limited Liability Companies (LLC's)?
A.
Officers/members are NOT COVERED AUTOMATICALLY. For officers/members to be covered, an Election Notice must be filled out and submitted to the Fund Office. If this coverage is elected, the premium will be based on a flat standard payroll amount of $45,200 (2020) for the owner or for each member who elects coverage.
Q.
Does the Fund cover Officers of a Corporation?
A.
If your company is incorporated, the officers of a corporation become employees of that company and are automatically included for coverage and premium development. The minimum and maximum payroll that can be used for premium computation purposes for 2020 are:
  • Minimum: $850.00/week or $44,200.00/year (amounts change yearly)
  • Maximum: $182,000.00/year (amounts change yearly)
If you are on a monthly reporting basis, begin excluding payroll on your monthly reports for officers after they receive $176,800.00 in the year.
Q.
What if an Officer(s) does NOT want to be included for coverage under the policy?
A.
Instructions for Officers Written Notice of Rejection or "Form-4":
  1. Pursuant to KRS 342.395, a Rejection Notice does not become effective until the original of the Form-4 is received and accepted for filing by the Department of Insurance. The only way for an officer to reject workers' compensation coverage is by the use of the Form-4. The mailing address is: Department of Workers' Claims, ATTENTION: Enforcement Branch, Prevention Park, 657 Chamberlin Avenue, Frankfort, KY 40601. Also, please send a copy to the Fund Office.
  2. The employer must keep file copies of all Rejection Notices signed by current officers. The Department of Insurance has the authority to conduct an investigation at any time.
  3. To be accepted by the Department of Insurance, a Form-4 must be complete in all respects and the date of the officer's signature and the date of the notary's signature must be the same.
Q.
As an Officer of a Corporation, can I withdraw my Rejection Notice?
A.
An officer has the right to withdraw the rejection of coverage by notifying the employer of his or her decision to withdraw the rejection. A Form-5 must be filed with the Department of Insurance. Please notify the Fund Office of this change so we may verify the date of filing.
Q.
Are Volunteer Laborers eligible for workers' compensation benefits?
A.
All Volunteer Laborers may be eligible for workers' compensation insurance benefits if a work-related injury occurs. Therefore, payroll must be reported and premium paid on Volunteer Laborers based on the average wages paid to your regular employees who perform similar or like work. Please contact the Fund Office should you have any questions regarding Volunteer Laborers.
Q.
Does the Fund provide Longshore and Harbor Workers' Compensation Coverage?
A.
The Fund provides Longshore and Harbor Workers' Compensation Coverage for those Fund Members with INCIDENTAL EXPOSURE ONLY (Longshore and Harbor Workers' Compensation Coverage requires prior approval by the Fund's excess insurance carrier.).
Q.
What is "incidental exposure" relative to Longshore and Harbor Workers' Compensation Coverage?
A.
For purposes of this limited scope of coverage, the Fund defines an "incidental exposure" as a work-related exposure comprising no more than 10% of the total annualized payroll for the policy year in which the exposure exists.
Q.
Does the Fund have Excess Insurance?
A.
Yes. The Kentucky AGC/SIF purchases Statutory Excess insurance to protect it from specific catastrophic losses and Employers' Liability with four million dollars per occurrence with no aggregate limit. This, in effect, guarantees the Fund a stop loss threshold for specific occurrences in a given year and generally satisfies the underlying limit requirements of most umbrella carriers for employers' liability.

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